Supply the issue for uranium in the future

Paladin Energy
boss
John Borshoff
has brushed off concerns about oversupply in the uranium market persisting in the wake of the Fukushima nuclear disaster in Japan.

Speaking at the Africa Down Under conference in Perth on Wednesday, Mr Borshoff, an unwavering believer in the future of uranium and the nuclear industry, said Fukushima had only damped demand for the commodity by 3 per cent.

Paradoxically, he said it would have a “real" impact on supply as companies were forced to delay or abandon development plans because of poor investor sentiment towards uranium.

Mr Borshoff was not concerned about the potential impact of
BHP Billiton
’s expansion of its Olympic Dam mine in South Australia on the uranium market. He said he expected the mining giant to focus on the other commodities produced at the site, copper and gold.

“They’ve already said they are going to concentrate on the copper-rich parts of the deposit and they’re not going to look at the uranium side," he said. “What the reasons are, I’ve got my ideas."

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He suggested that people had tended to overestimate the supply response in the uranium market and that many new mines slated for development would end up replacing old mines, as opposed to adding to total supply.

“People have to assess supply and demand, not with everything in time in perpetuity and every other mine coming in on top of that," he said.

“I believe Extract will be replacing Rossing. I believe Cigar Lake will be replacing the HEU [highly enriched uranium], the 14 million pounds that Areva and Cameco are getting, which is stopping in 2013. I believe Jabiluka is going to be replacing Ranger.